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Fill Out a Valid Alabama 65 Form

The Alabama 65 form is a tax document specifically designed for partnerships and limited liability companies (LLCs) to report their income to the Alabama Department of Revenue. This form must also be filed by syndicates, pools, joint ventures, and other similar entities. Accurate completion of the Alabama 65 form is essential to ensure compliance with state tax regulations and to facilitate the correct assessment of tax liabilities.

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The Alabama 65 form is a critical document for partnerships and limited liability companies operating within the state. Designed to report income, deductions, and various credits, this form must also be filed by syndicates, pools, and joint ventures. For the tax year 2010, it captures essential financial details, including total federal income, deductions, and assets as reported on Form 1065. Companies must indicate whether the return is initial, amended, or final, and provide their federal business code and employer identification number. Additionally, businesses operating in multiple states need to check the appropriate box to comply with Alabama regulations. The form includes schedules for calculating separately stated and nonseparately stated income, ensuring that all income sources are accurately reported. It also requires information on nonresident members and any applicable investment credits. Filing this form accurately and on time is crucial, as failure to do so may result in penalties or delays in processing. Understanding the nuances of the Alabama 65 form is essential for compliance and to maximize potential tax benefits.

Misconceptions

Misconceptions about the Alabama 65 form can lead to confusion and potential errors in tax filings. Here are seven common misconceptions along with clarifications:

Only partnerships need to file the Alabama 65 form. Many believe that only partnerships are required to use this form. However, it is also applicable to limited liability companies (LLCs), joint ventures, and syndicates.
The form is only for calendar year reporting. While the form does accommodate calendar year reporting, it can also be used for fiscal year filings. Taxpayers should indicate their specific reporting period on the form.
Filing an amended return is not necessary if no changes occurred. Some think they can skip filing an amended return if there are no changes. However, it is crucial to file an amended return if there were any errors or if the original return needs to be corrected.
Only income is reported on the Alabama 65 form. This form requires reporting not only income but also deductions, credits, and other financial details. It provides a comprehensive overview of the entity's financial activities.
All entities must attach federal Form 1065. While it is true that many entities must attach this form, some may not need to if they do not have federal income to report. Always check the specific requirements based on your entity's situation.
The Alabama 65 form is the same as the federal Form 1065. Although both forms share similarities, they serve different purposes. The Alabama 65 form is specifically tailored for Alabama state tax requirements and includes state-specific calculations.
Once filed, the Alabama 65 form cannot be changed. Many believe that after submitting the form, it is final. In reality, taxpayers can amend their returns if they discover errors or need to make adjustments after filing.

Example - Alabama 65 Form

FORM	10000165	ALABAMA
65
		DEPARTMENT OF REVENUE

• CY

• FY 2010

•SY

				Partnership/Limited Liability Company Return of Income

					ALSO TO BE FILED BY SYNDICATES, POOLS, JOINT VENTURES, ETC.
Important!						For Calendar Year 2010 or Fiscal Year																			DEPARTMENT USE ONLY
						For Calendar Year 2010 or Fiscal Year																			DEPARTMENT USE ONLY
				beginning • _________________________________, 2010, and ending • ____________________________, _________																				FN
	You Must Check
	Applicable Box:			FEDERAL BUSINESS CODE NUMBER						FEDERAL EMPLOYER IDENTIFICATION NUMBER
	Applicable Box:			•						•
				•						•

•	Amended Return			Name of Company																				Total Federal income as shown on
•	Amended Return																							Total Federal income as shown on
•	Initial Return			•																				Form 1065, line 8.
•	Initial Return																							•
																								•
•	Final Return			Number and Street																				Total Federal deductions as shown on
•	General Partnership																							Form 1065, line 21.
•	General Partnership			City or Town								State			9 Digit ZIP Code									•
				City or Town								State			9 Digit ZIP Code									•
•	Limited Partnership																							Total assets as shown on Form 1065.
																								Total assets as shown on Form 1065.
•	LLC/LLP			Check if the company operates				If above name or address is different from the one
•	LLC/LLP			in more than one state		•		shown on your 2009 return, check here											.	. . •
•				in more than one state		•		shown on your 2009 return, check here									. .	.	. . . .	. . •				•
•	Qualified Investment			Check if the company qualifies for the Alabama					Number of Members															CN
				Check if the company qualifies for the Alabama					Number of Members
	Partnership			Enterprise Zone Credit or the Capital Credit .			. . . . .	. . . . •	During The Tax Year								•

State in Which Company Was Formed					Nature of Business		Date Qualified in Alabama					Number of Nonresident Members
•					•		•					Included in Composite Filing . . .					•

				UNLESS A COPY OF FEDERAL FORM 1065 IS ATTACHED THIS RETURN IS INCOMPLETE
	SCHEDULE A				COMPUTATION OF SEPARATELY STATED AND NONSEPARATELY STATED INCOME
		1	Federal Ordinary Income or (Loss) from trade or business activities												. .	. . . . . . . . . . . . . . . . . . .			. . . . .	. . . . .	.	1			•
		2	Net short-term and long-term capital gains – income or (loss)						. .	. .	.	. . . .		2		•
		3	.Salaries and wages reduced for federal employment credits						. .	. .	.	. . . .		3		•(					)
		4	. . . . . . . .Net income or (loss) from rental real estate activities						. .	. .	.	. . . .		4		•
Reconciliation		5	. . . . . . . . . . . .Net income or (loss) from other rental activities						. .	. .	.	. . . .		5		•
Reconciliation		6	Net gain or (loss) under I.R.C. §1231 (other than casualty losses)											6		•
	to Alabama	6										. . . .		6		•
	to Alabama	7	Adjustments due to the Federal Economic Stimulus Act of 2008
	Basis (see	7
	Basis (see		(attach schedule)											7		•
	instructions)		(attach schedule)			. . . .	. . . . . . . . . .	. .	. .	.	. . . .			7		•
	instructions)	8	Other reconciliation items (attach schedule)											8		•
		8	Other reconciliation items (attach schedule)				. . . .	. . . . . . . . . .	. .	. .	.	. . . .		8		•
		9	.Net reconciling items (add lines 2 through 8)				. . . .	. . . . . . . . . .	. .	. .	.	. . . . .	.	. .	. .	. . . . . . . . . . . . . . . . . . .			. . . . .	. . . . .	.	9			•
		10	Net Alabama nonseparately stated income or (loss) (add line 1 and line 9)											. .	. .	. . . . . . . . . . . . . . . . . . .			. . . . .	. . . . .	.	10			•
		11	Contributions				. . . .	. . . . . . . . . .	. .	. .	.	. . . .		11		•(					)
		12	. . . . . . . . . . . . . . . . . . . . .Oil and gas depletion				. . . .	. . . . . . . . . .	. .	. .	.	. . . .		12		•(					)
		13	. . . . . .I.R.C. §179 expense deduction (complete Schedule K)						. .	. .	.	. . . .		13		•(					)
	Separately	14	. . . . . . . . . . . . . . . . . . . . . . . . . .Casualty losses				. . . .	. . . . . . . . . .	. .	. .	.	. . . .		14		•(					)
	Separately	15	Portfolio income or (loss) less expenses (complete Schedule K)											15		•
	Stated Items	15										. . . .		15		•
	Stated Items	16	Other separately stated items (attach schedule)											16		•
	(Related to	16	Other separately stated items (attach schedule)						. .	. .	.	. . . .		16		•
	Business	17	. . . . . . . .Net separately stated items (add line 11 through 16)						. .	. .	.	. . . . .	.	. .	. .	. . . . . . . . . . . . . . . . . . .			. . . . .	. . . . .	.	17			•
	Business	18	Total separately stated and nonseparately stated items (add line 10 and line 17)																			18			•
	Income)	18															. . . . .	. . . . .	.			18			•
	Income)	19	Alabama apportionment factor from Schedule D, line 4											19		•	%						Do not multiply line 18 by line 19
		19	Alabama apportionment factor from Schedule D, line 4						. .	. .	.	. . . .		19		•	%						Do not multiply line 18 by line 19
		20	Nonseparately Stated Income Allocated and Apportioned to Alabama from Schedule D, line 7																. . . . .	. . . . .	.	20			•

•I authorize a representative of the Department of Revenue to discuss my return and attachments with my preparer.

Please

Sign

Here

Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.

		(	)
Signature of general partner	Date		Daytime Telephone No.	Social Security No.

		Preparer’s
		Signature
	Paid	Firm’s name (or yours, •
	Preparer’s	Firm’s name (or yours, •
	Preparer’s	if self-employed)
	Use Only	and address
	Use Only
		•

Date	Check if		Preparer’s Social Security No.
	Check if
•	self-employed		•
Telephone No.		E.I. No.

()

ZIP Code

Email Address

Mail to: Alabama Department of Revenue, Individual and Corporate Tax Division, P.O. Box 327441, Montgomery, AL 36132-7441	ADOR
on or before April 15, 2011. (Fiscal Year Returns must be filed on or before the 15th day of the fourth month following the close of the fiscal year.)

		10000265
	Form 65 — 2010	Page 2

SCHEDULE B		ALLOCATION OF NONBUSINESS INCOME, LOSS, AND EXPENSE

Identify by account name and amount all items of nonbusiness income, loss, and expense removed from apportionable income and those items which are directly allocable to Alabama. Adjustment(s) must also be made for any proration of expens- es under Alabama Income Tax Rule 810-27-1-4-.01, which states, “Any allowable

deduction that is applicable to both business and nonbusiness income of the tax- payer shall be prorated to each class of income in determining income subject to tax as provided…” (See instructions).

	DIRECTLY ALLOCABLE ITEMS		ALLOCABLE GROSS INCOME / LOSS						RELATED EXPENSE					NET OF RELATED EXPENSE

			Column A		Column B			Column C			Column D			Column E			Column F
			Everywhere		Alabama			Everywhere			Alabama			Everywhere			Alabama
														(Col. A less Col. C)			(Col. B less Col. D)

Nonseparately stated items

1a		•
1b		•
1c		•
1d Total (add lines 1a, 1b, and 1c)														•
Separately stated items

1e		•
1f		•
1g		•
1h Total (add lines 1e, 1f, and 1g)														•

SCHEDULE C			APPORTIONMENT FACTOR SCHEDULE – Do not complete if the entity operates exclusively in Alabama.

	TANGIBLE PROPERTY AT COST FOR						ALABAMA							EVERYWHERE
	PRODUCTION OF BUSINESS INCOME				BEGINNING OF YEAR				END OF YEAR			BEGINNING OF YEAR					END OF YEAR

1	Inventories				•
2	Land				•
3	Furniture and fixtures				•
4	Machinery and equipment				•
5	Buildings and leasehold improvements				•
6	IDB/IRB property (at cost)				•
7	Government property (at FMV)				•
8	•

9	Less Construction in progress (if included)				•
10	Totals				•
11	Average owned property (BOY + EOY ÷ 2)							•								•
12	Annual rental expense				•	x8 =								x8 =
13	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Total average property (add line 11 and line 12)						13a	•				. . . . . .	. . . .	. . . . . . . . . . . .	13b	•
14	. . . . . . . . . . . . . . . . . . . . . . . . . . . . .Alabama property factor — 13a ÷ 13b = line 14					.	. . . . . .	. . . . . .	. . . . . . . . . . .	. . . . . . .	. . . . .	. . . . . . .	. . . .	. . . . . . . . . . . .	14	•	%
	SALARIES, WAGES, COMMISSIONS AND OTHER COMPENSATION							15a	ALABAMA			15b	EVERYWHERE			15c
	RELATED TO THE PRODUCTION OF BUSINESS INCOME
15	Alabama payroll factor — 15a ÷ 15b = 15c					.	. . . . .	•									%
			SALES						ALABAMA				EVERYWHERE

16	Destination sales			. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
17	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Origin sales			. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
18	. .Total gross receipts from sales		. . . . . . . . . . . . . . . . . . .	. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
19	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Dividends			. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
20	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Interest			. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
21	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Rents			. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
22	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .Royalties			. .	. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•
23	. . . . . . .Gross proceeds from capital and ordinary gains				. . . . . . . . . . . . . . . . . . . . . .	. .	. . . .	•

24Other •____________________________________ (Federal 1065, line •_____ ) •

25	Alabama sales factor — 25a ÷ 25b = line 25c	25a •	25b		25c	%
26	Sum of lines 14, 15c, and 25c ÷ 3 = ALABAMA APPORTIONMENT FACTOR (Enter here and on line 4, Schedule D, page 3)			26	•	%

ADOR

		10000365
	Form 65 — 2010	Page 3

SCHEDULE D		APPORTIONMENT AND ALLOCATION OF INCOME TO ALABAMA

1 Net Alabama nonseparately stated income or (loss) from line 10, Schedule A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2 Nonseparately stated (income) or loss treated as nonbusiness income (line 1d, Column E, Schedule B)

– please enter income as a negative amount and losses as a positive amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3 Apportionable income or (loss) – add line 1 and line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4 Apportionment factor from line 26, Schedule C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5 Income or (loss) apportioned to Alabama (multiply amount on line 3 by the percentage on line 4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6 Nonseparately stated income or (loss) allocated to Alabama as nonbusiness income (Column F, line 1d, Schedule B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7 Nonseparately Stated Income Allocated and Apportioned to Alabama (add lines 5 and 6). Enter this amount on line 20,

Schedule A and line 1, Schedule K – Alabama Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1•

2	•
3	•
4	•	%
5	•

6•

7•

	SCHEDULE E			OTHER INFORMATION
1	Indicate method of accounting	(a) •	cash	(b) •	accrual	(c) •	other
2	Check if the company is currently being audited by the IRS	•	What years are involved? __________________________________
3	Check if the IRS has completed any audits	•

4Enter this company’s Alabama Withholding Tax Account Number •

5 Briefly describe your operations •

•

6 Indicate if company has been(a) • dissolved(b) • sold(c) • incorporated If company has been dissolved, sold, or incorporated, complete the following:

Nature of change •

Name and address of new company, corporation, or owner(s) •

7Location of the partnership records •

8 Check if an Alabama business privilege tax return was filed for this entity •

If the privilege tax return was filed using a different FEIN, please provide the name and FEIN used to file the return.

FEIN: •	NAME: •

9Taxpayer’s email address:

	SCHEDULE K	DISTRIBUTIVE SHARE ITEMS
		Federal Amount	Apportionment		Alabama Amount	Enter on Alabama
		Federal Amount	Factor		Alabama Amount	Schedule K-1
			Factor			Schedule K-1
1	Alabama Nonseparately Stated Income (Schedule D, line 7)
1	Alabama Nonseparately Stated Income (Schedule D, line 7)			•		Part III, Line M
	Separately Stated Items:
2	. . . . . .Contributions	•				Part III, Line S
3	Oil and gas depletion
3	Oil and gas depletion	•				Part III, Line Z
4	I.R.C. §179 expense deduction
4	I.R.C. §179 expense deduction
	a. Amount allowed on 1065	•
	. . . . . . . . . . . . . . . . . . . . . .b. Adjustments required (see instructions)	•
	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .c. Amount to be apportioned	•				Part III, Line O
5	. . .Casualty losses
5	. . .Casualty losses	•				Part III, Line W
6	. . .Portfolio income
6	. . .Portfolio income	•				Part III, Line Q
7	Interest expense related to portfolio income
7	Interest expense related to portfolio income	•				Part III, Line P
8	Other expenses related to portfolio income (attach schedule)
8		•				Part III, Line R
9	Other separately stated business items (attach explanation)
9	Other separately stated business items (attach explanation)	•				Part III, Line T
10	Small business health insurance premiums (attach explanation)
10				•		Part III, Line Y
11	. . . . . . . . . . .Separately stated nonbusiness items (attach schedule)	•		•		Part III, Line AA
12	. . . . . . . .Composite payment made on behalf of owner/shareholder			•		Part III, Line U
13	. . . . . . . . . . . . . . . . . . . . . . . . . . . .U.S. taxes paid (attach explanation)	•				Part III, Line V
14	Alabama exempt income (attach explanation)
14	Alabama exempt income (attach explanation)	•				Part III, Line AB
	Transactions with Owners:
	Transactions with Owners:		100%
15	Property distributions to owners	•	100%	•		Part III, Line X
15	Property distributions to owners	•		•		Part III, Line X
16	Guaranteed payments to partners
16	Guaranteed payments to partners	•		•		Part III, Line N

CHECK LIST

HAVE THE FOLLOWING FORMS BEEN ATTACHED TO THE FORM 65?

ALABAMA SCHEDULE K-1 (one for each owner)

ALABAMA SCHEDULE NRA (if applicable)

FEDERAL FORM 1065 (entire form as filed with the IRS)

ADOR

*10000465*

Form 65 — 2010

Page 4

Required Entity Information For Partnerships and LLCs

1. List general partners.

NAME OF GENERAL PARTNER

SSN / FEIN

ADDRESS

a.•

b.•

c.•

d.•

e.•

PERCENT OF OWNERSHIP

2. List other states in which the Partnership/LLC operates, if applicable.

3. At any time during the tax year, did the Partnership/LLC transact business in a foreign country?		Yes	No
If yes, complete the information below:

NAME OF COUNTRY	NATURE OF BUSINESS			TAXABLE INCOME
NAME OF COUNTRY	NATURE OF BUSINESS			REPORTED TO COUNTRY
				REPORTED TO COUNTRY

a. •

b. •

c. •

d. •

e. •

4. At any time during the tax year, did the Partnership/LLC invest in another Pass-Through entity?	Yes		No
If yes, complete the information below:

NAME OF ENTITY		FEIN		PERCENT OF
NAME OF ENTITY		FEIN		OWNERSHIP
				OWNERSHIP

a. •

b. •

c. •

d. •

e. •

5.Person to contact for information regarding this return:

Name:

Telephone Number: (

)

Email:

ADOR

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Similar forms

The Alabama 65 form is comparable to the IRS Form 1065, which is used by partnerships to report income, deductions, and credits. Both forms require detailed financial information, including total income, deductions, and assets. Just as the Alabama 65 form is specific to Alabama state tax requirements, Form 1065 adheres to federal tax regulations. Each form also necessitates a declaration of accuracy and completeness, ensuring that the information provided is truthful and verified by the responsible parties.

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Another document similar to the Alabama 65 is the IRS Schedule K-1, which partnerships use to report each partner's share of income, deductions, and credits. The Alabama 65 form includes a section for the distributive share items, mirroring the function of Schedule K-1. Both documents aim to allocate income and deductions among partners, ensuring that each partner receives accurate information for their individual tax filings. This allocation process is crucial for compliance with both federal and state tax laws.

The Alabama Business Privilege Tax Return (Form CPT) shares similarities with the Alabama 65 form, as both are filed by business entities operating in Alabama. The Business Privilege Tax Return assesses a fee based on the business's net worth, while the Alabama 65 focuses on income reporting. Both forms require information on the business structure, such as partnerships and limited liability companies, and necessitate the reporting of various financial metrics, ensuring that businesses comply with state tax obligations.

The IRS Form 1120S, used by S corporations, is also akin to the Alabama 65 form. Both forms serve to report income, deductions, and credits for pass-through entities. The Alabama 65 form includes sections for separately stated items, similar to how Form 1120S allows for the reporting of specific items that may affect individual shareholders. This parallel is essential for ensuring that both state and federal tax reporting aligns for these types of entities.

Additionally, the Alabama Corporate Income Tax Return (Form 20C) resembles the Alabama 65 form in that both are used for reporting income by business entities in Alabama. While the Alabama 65 is specific to partnerships and LLCs, Form 20C is tailored for corporations. Both forms require comprehensive financial disclosures, including total income and deductions, and they share similar filing deadlines, emphasizing the importance of timely compliance with state tax regulations.

Lastly, the IRS Form 1065-B, which is designed for electing large partnerships, is comparable to the Alabama 65 form. Like the Alabama 65, Form 1065-B requires detailed reporting of income and deductions. Both forms facilitate the allocation of income among partners, ensuring accurate reporting for tax purposes. This similarity underscores the shared goal of both forms: to provide a transparent and accurate representation of a partnership's financial activities to tax authorities.

Common mistakes

Filling out the Alabama 65 form can be a daunting task. Many people make common mistakes that can lead to delays or complications. Understanding these pitfalls can help ensure a smoother filing process.

One frequent error is failing to check the correct box for the type of return being filed. The form allows for initial, amended, and final returns. If a taxpayer mistakenly selects the wrong option, it could result in significant issues with the processing of the return.

Another common mistake is not attaching the required Federal Form 1065. The instructions clearly state that without this form, the return is considered incomplete. Taxpayers often overlook this requirement, thinking that their information alone is sufficient.

Many individuals also miscalculate their total federal income or deductions. This can happen due to simple arithmetic errors or misunderstanding the lines on Form 1065. It's crucial to double-check these figures to avoid discrepancies that could raise red flags.

Some filers forget to include the nature of their business and the state in which the company was formed. This information is essential for the Alabama Department of Revenue to process the return accurately. Leaving it blank can lead to confusion and delays.

Another mistake involves incorrectly reporting the number of nonresident members. This detail is important for determining tax obligations. Misreporting can affect the overall tax calculation and lead to potential penalties.

Many people fail to reconcile their income and deductions correctly. This reconciliation is necessary for ensuring that the reported income aligns with the deductions taken. Errors in this section can lead to audits or additional tax liabilities.

Some taxpayers neglect to sign the form or provide the preparer's information. A missing signature can render the return invalid. Additionally, not including the preparer's details may complicate communications with the tax authority.

Lastly, many individuals do not keep copies of their submitted forms and supporting documents. This can create issues if the Alabama Department of Revenue has questions or if there are discrepancies later on. Keeping thorough records is essential for any business.

By being aware of these common mistakes, taxpayers can approach the Alabama 65 form with greater confidence and accuracy. Taking the time to review each section carefully can save time and reduce stress during tax season.